Barclays posts £6.08bn profit for 2008

by Gill Montia

Story link: Barclays posts £6.08bn profit for 2008

Barclays has come up with the goods and reported pre-tax profit of £6.08 billion for 2008, well ahead of analysts’ estimates of £5.3 billion.

The result is 14% down on 2007 but more than justifies the action taken by its chief executive and chairman last month, when in an open letter they reassured investors that profit for the year would be “significant”.

However, writedowns stood at £5.4 billion in 2008, almost double a year earlier.

Profits from retail banking rose 7% to £1.37 billion, although commercial banking posted a 7% fall in earnings to £1.27 billion.

Given the market turmoil of last year, Barclays’ achievement should end speculation about its capital position.

Last October, the bank opted to raise money from Middle Eastern investors, rather than benefit from the Government’s bail-out fund.

Since then reports in the press have suggested that the group is unable to raise further capital until the middle of this year, without handing majority ownership of the business to investors in Qatar and Abu Dhabi.

Uncertainty surrounding its balance sheet has contributed to a fall in Barclays’ share price, which has lost around 80% over the past 12 months.